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“The Rise of the UK Warehouse” – ONS Report

In figures released on 11th April, the Office for National Statistics announced that the number of business premises used for transport, logistics and warehousing in the UK has almost doubled in the last decade. In more recent times, there has been a 21% increase in the number of UK business premises classified as transport and storage between 2019 – 2021.

This dramatic increase in warehousing can arguably be attributed to two different reasons:

1. The Coronavirus pandemic resulting in a dramatic upturn in online shopping

2. Continuous delays, complications and additional costs caused by Brexit

In terms of the effect caused by Coronavirus, the pandemic (and subsequent lockdowns) saw a hike in demand for online shopping. This demand peaked in January 2021 when online shopping accounted for nearly 38% of all retail sales. To add some context to this, in February 2020, online shopping only accounted for 19% of all retail sales.

Despite businesses moving away from physical shops, there is still a need for space to hold and manage their stock. Plus, due to the increase in consumer demand and next-day delivery their stock needs to be held in an easily accessible location.

As for the second point, the delays, complications and costs arising because of Brexit have been well documented. Businesses have struggled with the new origin requirements which in-turn have resulted in additional customs duty costs. This issue has peaked for businesses who can be described as distributors. For example, a business may import a product from an EU supplier which was in free circulation within the EU. Unfortunately, these goods are not of EU origin resulting in customs duty being payable at import into the UK. The businesses then face another duty payment when they send their goods to EU consumers. In essence, double duty is being paid. To mitigate the duty issue businesses are turning to customs warehousing.

All of this has led to an increased desire and need for warehousing space.

So, what is the picture in the northeast of England? Well, surprisingly, it is not following the national trend. During their research, the ONS ranked each local authority by percentage of business units used for transport and storage in 2021. On average, the 5 local authorities which make up Tees Valley Combined Authority sat in 238th position (out of 374). The north of the region fared slightly better with a combined position of 177th for their 6 local authorities.

Overall, the desire and need for warehousing space is increasing across the UK. Warehousing isn’t always simple however, if you get it right, you can see a great financial benefit for your business.

Contact us!

If you need help understanding how a warehouse could benefit your business or, understanding the different types of warehouses then contact us on 01740 618 742.

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